UPM’s President and CEO Jussi Pesonen comments on the first quarter of 2005

Key figures for 1-3/2005 (1-3/2004):
- Operating profit, excluding non-recurring items, was EUR 173 million (EUR 99 million)
- Earnings per share, excluding non-recurring items, were EUR 0.20 (EUR 0.09)
- Sales were EUR 2,278 million (EUR 2,451 million)
- Paper deliveries were 6% down on this period last year

UPM’s President and CEO Jussi Pesonen comments on the first quarter of 2005:

“UPM’s profitability improved during the first quarter despite lower sales and deliveries. Last year’s restructuring of the wood products business, focus on Raflatac, improvements in cost-efficiency and increases in sales prices for papers all had a positive impact on profitability. Over the past twelve months, we have achieved a positive turn-around in all our divisions."

“On paper markets, we emphasized the importance of profitability over volumes. Demand for paper has remained good during the first three months. Long-term forecasts for the advertising business are for this positive trend to continue. The increases in paper prices materialized mainly as anticipated, with the exception of coated fine paper. Paper prices in euro terms in the United States are currently at the same level as in Europe, which has brought better balance to the market."

“Second-quarter paper deliveries are forecast to be higher than last year. The average price for paper is expected to be up on the first quarter partly due to already agreed higher prices. Demand for converted products is expected to remain good. Plywood is also in good demand, while the market for sawn timber will continue to be over-supplied. Possible strikes at the Finnish mills may affect both deliveries and profit for the second quarter”, says Mr Pesonen.

For more information contact:
Jussi Pesonen, President and CEO, UPM, tel. +358 204 15 0001
Kari Toikka, Executive Vice President and CFO, UPM, tel. +358 204 15 0014

UPM
Corporate Communications
26 April 2005

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News Conference and Conference Call Information

A news conference regarding the January-March Interim Report will be held today, 26 April 2005, at UPM's Head Office at 13:30 Finnish time (11:30 GMT, 06:30 EST). The briefing can be followed live on the internet at the address www.upm-kymmene.com. A recording of the briefing can be seen at this address for the following three months.

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